Capital adequacy: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Typo correction remove ]) |
imported>Doug Williamson (Mended link) |
||
| Line 29: | Line 29: | ||
* [[Pillar 2]] | * [[Pillar 2]] | ||
* [[Pillar 3]] | * [[Pillar 3]] | ||
* [[PLAC] | * [[PLAC]] | ||
* [[RRR]] | * [[RRR]] | ||
* [[RWAs]] | * [[RWAs]] | ||
Revision as of 13:11, 17 August 2016
1.
The system of regulating banks (and other financial institutions) by requiring them to maintain minimum acceptable levels of capital, adequate to absorb their potential credit losses and other trading losses.
2.
The prevailing minimum amount of risk weighted capital that banks are required to maintain in proportion to the risk assets that they assume, normally used in connection with the requirements laid down internationally by the Bank for International Settlements (BIS) and monitored by domestic central banks.
Historically the BIS standard has been 8%.
Under Basel III this standard is increased (strengthened) substantially - very roughly doubled - and its measurement is refined.
